R&D Tax Relief

The measure

From April 2013 the Government will introduce an above the line (ATL) R&D credit. This will have a minimum before tax benefit rate of 9.1% and enable loss making companies to claim cash credits. A consultation will be announced shortly after the Budget dealing with the design of the credit and the rates of relief.

This change will move the R&D benefit from the tax line in a company's accounts to operating profit. A company will therefore be able to directly offset the relief against the cost of carrying out qualifying R&D in the same was as it would with a grant. This will make the relief more visible to the people carrying out the R&D and is expected to drive positive decision making behaviour by industry.